Appraisal and loan value?

[Will Stewart]

I am new to this but can someone explain how the appraisal is reflected in loan value on a rental property that is being purchased? What is a good ratio? Thank you.

[Dana Whicker]

Quote from @Will Stewart:

Thanks Zachary. I was looking at a property and the appraised value is the purchase price. I was told that was not necessarily good since it would decrease my loan value. Does that sound correct? I know I want to make my money going in and this seems like it cancels that option out.

I don't know your market but my first thought is the appraised value being equal to the purchase price, in the current market, is a good thing and will not decrease your loan value. In my market, it is rare for this to happen lately. For the last 2 years almost nothing has been appraising for purchase price. The appraisals are all coming in low to very low, so you did ok, assuming you're in a hot market.

What I'm saying is, in my market everything is either being purchased with cash or people are bringing extra cash to closing, for now.